The Blog of International Judicial Assistance | By Ted Folkman of Pierce Bainbridge

Case of the Day: In re Chevron Corp.

Posted on July 4, 2012

The case of the day is In re Application of Chevron Corp. (S.D. Fla. 2012). Chevron applied under § 1782 for leave to issue a subpoena to Banco Pichincha, C.A. Miami Agency for account records for the Amazon Defense Front, Luis Yanza Angamarca, Jorge Enrique Jurado Mosquera, CESAQ-PUCE Laboratory, and Selva Viva Selviva Cia Ltda., and for suspicious activity reports.

I may be overreading Magistrate Judge William C. Turnoff’s recitation of the facts, but his tone suggests that he basically bought Chevron’s allegations of fraud. For instance, he writes that Chevron “has obtained mounds of evidence” in support of its allegation that the judgment was ghostwritten, and that the Lago Agrio plaintiffs had “found their man” in Richard Cabrera. “[T]he fraud began to unfold” after the release of Crude, and so forth.

After Chevron brought its § 1782 application, the Lago Agrio plaintiffs intervened to oppose issuance of the subpoena. They argued that the BIT arbitration was not a proceeding before a “tribunal” but was instead merely a “private investment arbitration.” This argument seems clearly wrong—even though there is a question whether truly private arbitrations are proceedings before “tribunals” for purposes of § 1782, an investor-state arbitration, conducted pursuant to a bilateral investment treaty, seems clearly to be a proceeding to which § 1782 applies. The Lago Agrio plaintiffs also argued that Chevron’s “true objectives” were “to interfere with” the Ecuadoran judgment and to use the requested discovery in the New York RICO case. The judge easily dismissed these arguments.

Banco Pichincha argued that the application should be denied because it was merely the separately organized US branch of an Ecuadoran bank, and the documents were in Ecuador; according to the bank, § 1782 does not reach the documents Chevron requested. Chevron argued that the Banco Pichincha Miami “is ‘the bank’ and that its own public filings confirm that they are, in fact, the same corporate entity.” 1 The judge agreed with Chevron, noting that the bank’s US customers had “unrestricted access” to deposits in Ecuador and that “the bank’s corporate structure reflects co-mingling and interdependence of business transactions.” But more fundamentally, the judge rejected the argument that § 1782 only reached documents located in the United States. I think this is the better view. As long as the target of the discovery is within the personal jurisdiction of the court, then there seems to be nothing in the text of the statute or in the notion of personal jurisdiction to prevent the court from compelling a party subject to its jurisdiction to produce documents whereever located. If there are foreign law limitations on production, e.g., a blocking statute, it will be considered in the discretionary portion of the Intel analysis.

The Bank also argued that Ecuadoran banking law forbade production of the documents. This is, of course, a factor to be considered in the court’s discretionary analysis. However, the judge adopted the view of Chevron’s expert, Ana Maria de Alba, production of the documents would be consistent with the exceptions to disclosure in Ecuador’s banking laws, and in any event it was not clear that any banks had ever been sanctioned for violating the bank secrecy law in Ecuador.